FSA implements proposed PEP rules on investment limits and permitting the cost of in-house PEPs being charged to the property of the unit trust

United Kingdom
In August 1997, the (then) SIB published Consultative Paper 110 on proposed changes to the regime governing Collective Investment Schemes (see FS Brief 29 page 17).


In Rule Releases 178 and 179 the FSA has now implemented the proposed changes in two areas.


PEP/savings plan - registers


The regulations have been amended to permit the cost of in-house PEP and saving scheme sub-registers being charged to the property of the unit trust, provided that specific provision is made for such investors to receive regular information about the fund, have the right to attend and speak at meetings, and for the fund managers to implement the members' voting wishes. Previously, such rights had only resided with the PEP nominee.


Investment limits


Previously, unit trusts and OEICs could allow up to 100% of the value of their fund to be in "pre-listed" securities. Following the Morgan Grenfell unit trust problems two years ago, the limit for investments in pre-listed securities has been brought within the current 10% limit for investment in unlisted securities. In addition, the Manager of the funds is required to ensure that the scheme properly provides a prudent spread of risk (in line with the UCITS directive).